Wisconsin § 71.10 - General provisions.

§ 71.10. General provisions.

71.10(1) (1) Allocation of gross income, deductions, credits between 2 or more businesses. In any case of 2 or more organizations, trades or businesses (whether or not incorporated, whether or not organized in the United States, whether or not affiliated, and whether or not unitary) owned or controlled directly or indirectly by the same interests, the secretary or the secretary’s delegate may distribute, apportion or allocate gross income, deductions, credits or allowances between or among such organizations, trades or businesses, if the secretary determines that such distribution, apportionment or allocation is necessary in order to prevent evasion of taxes or clearly to reflect the income of any of such organizations, trades or businesses. The authority granted under this subsection is in addition to, and not a limitation of or dependent on, the provisions of ss. 71.05 (6) (a) 24. and (b) 45. , 71.26 (2) (a) 7. and 8. , 71.34 (1k) (j) and (k) , 71.45 (2) (a) 16. and 17. , and 71.80 (23) . 71.10(1m) (1m) Transactions without economic substance. 71.10(1m)(a) (a) If any person, directly or indirectly, engages in a transaction or series of transactions without economic substance to create a loss or to reduce taxable income or to increase credits allowed in determining Wisconsin tax, the department shall determine the amount of a taxpayer’s taxable income or tax so as to reflect what would have been the taxpayer’s taxable income or tax if not for the transaction or transactions without economic substance causing the reduction in taxable income or tax. 71.10(1m)(b) (b) A transaction has economic substance only if the transaction is treated as having economic substance as determined under section 7701 (o) of the Internal Revenue Code, except that the tax effect shall be determined using federal, state, local, or foreign taxes, rather than only the federal income tax effect. 71.10(1m)(c) (c) With respect to a transaction between members of a controlled group, as defined in section 267 (f) (1) of the Internal Revenue Code, the transaction shall be presumed to lack economic substance, and the taxpayer shall bear the burden of establishing by clear and satisfactory evidence that the transaction or the series of transactions between the taxpayer and one or more members of the controlled group has economic substance. 71.10(2) (2) Assessment of income distributable to a nonresident beneficiary. The income of a trust distributable or distributed to a nonresident beneficiary shall be assessed as the income of other nonresidents is assessed. No personal exemptions shall be allowed in assessing the income of such nonresident beneficiary unless that person makes a complete return under this chapter. 71.10(4) (4) Computation order. Notwithstanding any other provisions in this chapter, all persons other than corporations computing liability for the tax under s.